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The Relevance of a
Decade:
Essays to Mark the First Ten Years of the Harvard Business School Press:
Extract:
Thoughts of an Explorer of Two Worlds
Extract's Table of Contents:
When I'm asked what my field is and what I write about, my answer is that I don't have a field but that I translate across fields. My work addresses "information technology and X." Information technology (IT) refers to the combination of computers, telecommunications, and information as a business resource; and X includes such issues as industry competition, organizational change, management policy and decision making, international business, education, financial planning, careers, business process investment, organizational design, and many other topics. Perhaps the "and" should be capitalized too: "IT AND X" since it's the fusion of the two areas that is my focus. There are plenty of people working in each area separately-say, telecommunications (IT), or global competition (business), but not many who explicitly bring these together in a way that
does justice to both business and technology.
I emphasize that last phrase because it is the basic driver of my work, a driver that makes me both a translator and synthesizer across fields and leaves me at times feeling totally adrift and part of none. I believe that this is a mirror of the dilemma organizations face: while business increasingly depends on IT, and IT increasingly relates to organizational and business change, there are no established language and management process that bring them together. They are often linked artificially, through management "awareness" programs, consultants' methodologies, and the many IT fads, of which the "information superhighway" and "multimedia" are the most recent. In a relatively few companies, they are fused through a rare style of management that views IT as no big deal but just a recognized leadership responsibility, and also through a not-quite-so-rare style of IT management that is able to build an effective relationship with the top management team.
Not much has changed over the years in the relationship between management processes and IT, even though the technology has changed dramatically, radically, and at a nonstop and
non-stoppable pace. My first article in the Harvard Business Review appeared in 1974. It was titled
"How Managers' Minds Work." In 1994 I might add a subtitle,
"Very Different from IT People's." My twenty years of observing, writing, and teaching amount to about half the history of IT in business organizations. In 1974 executives had little reason to pay attention to their data processing (DP) departments since DP was peripheral to the mainstream of the business. Now IT is in the mainstream, or even is the mainstream. Yet very few of the most outstanding chief executives I deal with feel that IT is under control within their firms. They don't know what they don't know so they worry that their information services (IS) organization and chief information officer (CIO) may be putting the business at risk. These executives are agnostics about the many claims that IT creates competitive benefits and productivity. They are increasingly bored by IT gurus and management awareness programs. These are people with reliable intuitions about finance, strategy, and organization. But they do not have sound intuitions about IT.
For CIOs, the past few years have mainly been a twilight of empire.
Business Week's epigram that CIO really stands for Career Is Over rings truer and truer by the year. CIOs are being fired at twice the rate of other senior managers; their average tenure is down to under two years in a field where it takes seven years to make major innovations in technical infrastructures. The field of IS management is in disarray and nearly panic-stricken. The simple, centralized corporate organization is being dismantled at a time when it is obvious that central coordination of decentralized uses of IT is vital if the firm is to avoid
multi-technology chaos. Many IS groups are being downsized and outsourced.
There is an almost political revolution in the part of the IT culture that has been its core and its main source of identity: the programmers, the systems analysts, and the project leaders who built the many systems now in use in large firms. These are often termed "legacy" systems, a very misleading tag that suggests a rich aunt has left you a villa in France. In reality, they are ancestral curse systems: your uncle has cursed you unto the nth generation. Many of these systems are ten to twenty years old, cumbersome, expensive to maintain, and based on obsolete technology. The people who built them are seen as part of the past; and a new style of technology, development, and skill base called "client/server" is viewed as the wave of the future. In firms that commit to client/server, roughly half the existing IS staff has been asked to move on to pursue other career interests. Personal computer bigots have taken over from mainframe bigots.
The result of all this turmoil is that top management is not comfortable, the old IS management processes are ineffectual, and the IT experience base is obsolescent. That's exactly the same situation as in 1970, 1980, and 1990, and it will probably be the same situation in 2000. I call management's discomfort with IT a "classic" problem, one that is independent of technology, time, and industry. I built my work around the classic problems-those conditions, situations, and issues that get in the way of firms' getting the best value from IT.
When all leading firms in an industry have access to the same technology, competitive and organizational advantages come from the management difference. This difference rests fundamentally on the nature of the business-technology dialogue and on managers' comfort in leading the deployment of IT through a small number of policy decisions, including the setting of business goals and the funding of key technical infrastructures. When managers lead in this way, others can handle design and delivery. When they don't, time and again, top firms miss key business trends that require specific IT investments essential to their competitive positioning, and IT is largely delegated to a CIO. Delegation is not a strategy.
Management discomfort with IT is a classic problem. My efforts to contribute to solutions rely on three principles:
(1) the main issue is lack of a shared language,
(2) the levers for change precede "strategy," and
(3) the major sources of insight will come from focusing on what's old, not new, about IT.
I often describe my work as the communication of ideas that will be considered simple common sense three to five years from now. IT is not nuclear physics, and understanding its key concepts is as easy for managers as understanding the key concepts of finance or human resource management. But because both business and IT gurus, consultants, and practitioners treat IT as "different" and "special," they create a self-reinforcing mental model. By saying IT is technical innovation and describing it as the "something" of the future-office of the future, factory of the future, or workplace of the future-they lose respect for both history and common sense. By not accepting IT as a business resource that is two heads of the same coin-heads, it's technology, and tails, it's organization and business-they compartmentalize instead of fuse. Heads may look very different from tails, but the coin is still the same coin.
LANGUAGE IS KEY
Language is as much a political as a cognitive issue. It shapes "reality." Also, it strongly influences perceptions and, more important, determines whose perceptions will matter. To have to talk in a language you do not understand is to lose confidence and any sense of control. To talk in a language no one listens to is to go unheard and unrespected. It is no secret that the IT field is dominated by an alphabet soup of jargon and an irritating tendency to create flashy sounding neologisms for relatively simple concepts. The jargon is often as essential as the equally arcane jargon of finance; it is the shorthand professionals use in talking to each other. There can be little doubt that the IT fraternity has used jargon too often to minimize dialogue and communication with its "users"-that very term signals a condescension and an attitude that turn clients and colleagues into abstractions. That said, it's not really the jargon that's the problem, but the everyday words like "application," "architecture," "integration," and & ; that block mutual understanding. I frequently sense in business managers a puzzlement when they listen to IT professionals who are genuinely trying to be business-focused and service-centered; they listen, but they don't hear.
The best and most influential of the business literature doesn't help much. There is no established business language for describing the key elements of the technology that matters most in terms of management policy decisions. Thus, leading books on new organizational forms, time-based competition, business transformations, and the like assume that IT is a central element in implementing the strategies the author is recommending. But authors rarely talk about how managers translate business opportunity into technology decisions or about how technical opportunities shape business decisions. The field of IT research that has addressed these issues has had minimal impact on the new intellectual mainstream of management thought; I include my own work in that assessment. When I read many of these books, the technician side of me thinks, "This can't work, the technology is unproven," "This takes at least seven years," "This is an invalid conclusion because this technology is rapidly changing the basics of
business," and so on. And I am by no means a technical expert. When Michael Porter writes a major book on the competitive advantage of nations without mentioning the immense role of telecommunications in how cities compete (London dominates European financial markets because of its superior, low-cost telecommunications system), and without even citing the work of his influential Harvard colleagues in the IT field, it is dear that IT researchers have been no more successful in creating a language for building mutual understanding with business researchers than IT practitioners have been in bridging the gap with business managers. Managers can justifiably argue that most IT people do not understand, or have any real interest in, business. My own view is that the management theorists I most respect, and the writers I most enjoy reading, don't have a due about IT as a business resource or the key factors required to make it one. Again, this is a translation issue: the business-focused IT researchers who understand the technology have to create the language and make it meaningful, interesting, substantive, and important to scholars like Porter.
So, why haven't they? Why haven't I? As someone who moves between many cultures-business and academia, the public and private sectors, IT, business strategy, organization and human resources, financial planning, and so forth, I've long been an observer of the problem. In fact, I have managed to offend just about all parties by trying to highlight what they are missing in their own niches. It has taken me about twenty years to zero in on the explanation of the problem: the overemphasis on IT strategy.
CHANGE BEFORE STRATEGY
The levers for changing the business-IT relationship must be in place before strategy can be developed. It's fashionable in IT circles to talk about the need
to" align" the IT strategy with the business strategy. Given the very different lead times between fast and flexible business change and the necessarily slow and rigid timetables for making major changes in IT infrastructures-the equivalent of building a railroad or a federal air transportation system for personal computers to move along safely, reliably, and flexibly-aligning IT with the business strategy comes too late. In addition, the very idea of an IT "strategy" keeps IT compartmentalized.
In trying to understand the historical evolution of IT in business and the continued tensions of the business-IT management process and relationship, I have found it useful to classify the relationship in terms of three very different priorities: managing the technology, managing the use of the technology, and managing with technology. Quickly stated, for almost twenty-five of the roughly forty years of IT in business, the important perceived management and research issue was managing the technology. Key concerns were systems development, project management, organization of the information services resource, ensuring user involvement, and making systems work organizationally as well as technically. In the late 1970s a new and parallel line of research and practice emerged that focused on managing the use of the technology: first, decision support systems, a then-radical shift, that put computer power into the hands of managers; second, office technology that placed computers on the desktops of support staff for the first time; and third, operations integration that brought a proliferation of personal computers across the entire business landscape. As computers and, to a lesser extent, telecommunications began to permeate more and more areas of business operation, the organizational focus shifted. The emphasis changed from managing the data processing unit to ensure effective development and management control of large-scale systems to organizing for effective use of the technology by end users in order to create competitive advantage. Effectiveness was the rallying cry of the early 1980s. For the first time IT was viewed in business terms; and leading academics, IS managers, and the niche consulting firms near the banks of the river Charles in Cambridge addressed the issue of IS strategy and planning aimed at using the technology most effectively rather than managing it most efficiently. This was the heyday of awareness education programs for business managers and managers of IS methodology.
I recall this period, roughly the late 1970s to the early to mid-1980s, as the most exciting time of my career, intellectually and professionally. There was a rich dialogue between business school researchers and the IS management community. There was a high level of energy and an unusual openness to ideas from many different fields. The CIO was the new hero. In the Harvard Business Review there was a flow of articles whose titles were aggressively optimistic about the business contributions of IT. Many of the most influential contributions to research came from practitioners, and many researchers had an equally strong influence on practice.
Looking back, though, I see the problem. The IT field was talking mainly to itself. By focusing on IT methodologies, making "IT-and-competitive-advantage" almost a breathless single word, and stressing the notion that IT strategy and the CIO as strategist were the key drivers for exploiting IT, the very successes of the field created an introversion. The dialogue was among IT people, not from IT to business managers and leaders of business thought. This shows up in one of the mini-industries of IT research in the 1980s: citation analysis. Many articles looked at the evolution of the field in terms of which authors were cited most often and what their main topic areas were. Alas, the citations were of IT articles within other IT articles.
Had the analyses looked at citations by writers like Peter Drucker, Tom Peters, Michael Porter, Charles Handy, and Alfred Chandler, the results would have signaled that no matter how frequently X was cited in the IS literature, no one outside IS was interested.
I can see now that the really consequential issue for both research and practice is not managing the technology or managing the
use of the technology, important though they continue to be for businesses, but managing with technology-embedding it in everyday management thinking and in all elements of strategy. I recall two examples of the extremes of senior executives' perspective on IT as integral to management.
The first was the comment to me by the chairman of one of Europe's largest car manufacturers. He said he was proud that he had worked in every part of the business except information systems, and that that was how it would be when he retired in a few years. (This is a variant on the "I'm too old to learn about computers" routine.) My response was to ask how he would feel about one of his top managers boasting that he knew nothing about finance or human resources.
The other instance was a brief meeting with the CEO of Dillard. This retailing chain, along with Wal-Mart, Circuit City, and a few others, used IT to transform the entire nature of the chain of logistics for getting the right goods on the right shelves in the right stores at exactly the right time, thereby pushing Sears and Kmart into a long rear-guard recovery. Mr. Dillard, Junior, told me that the company was not very good at handling IT-this from one of the best in the business!-but that it was good at store management. I realized that for him, IT was not a separate compartment or a separate strategy; when Dillard thinks about logistics, it thinks about IT. When it manages its supply chain, it managed IT. IT was no big deal.
IT is a big deal if the IT field keeps trying to make it different, if top managers don't know how to fuse it into their own assumptions and vision, and if the best management thinkers and writers don't understand its key features and dynamics. IT is also a big deal if IT experts and business managers focus only on
what's "new" in IT.
VIEWING THE NEW IN THE CONTEXT OF THE OLD
History matters. I am deeply suspicious of every IT fad that promises a wonderful future something without looking at the past forces which either constrain or accelerate its progress. Too readily IT enthusiasts talk about the office of the future without any idea of the office of the past, and without an awareness of the social forces that are often far more of a factor than technical innovation. The obvious instance is the century-long dominance of the QWERTY keyboard, which was designed by one of the entrepreneurs trying to create a market for typewriters. He solved the problem of the machine's hammers jamming by locating the keys in a configuration designed to slowdown typing. That deliberate reduction in productivity survives to this day, and non-QWERTY keyboards, which offer thirty to forty percent increases in productivity, have never displaced their predecessor.
The "IT-is-new" attitude again and again has over-hyped technology by ignoring the nature of social and organizational change and the nature of work, workers, and working. IT experts have an investment in the "future" as innovation; their business is the promise of the new. They lack respect for history; too often an awareness of the past is labeled "resistance to change." I find very little that is completely new in IT because, always, newness has to be related to the old in order to be understood. I revere the French historian Fernand Braudel, one of the great
annalistes who argues that history is not about events and dates but about changes in the limits of the possible in the structures of everyday life. Braudel says that the "secular" cycle of change has to be viewed in terms of
la longue durée-a century or more, not the next five years. Automated teller machines changed the limits of the possible in the structures of everyday life and became part of the fabric of our lives in a decade. Most elements of IT that involve complex and fundamental shifts in the nature of work and social relationships take at least three generations of the work force to become part of that fabric.
Innovation in IT is not an issue of technical innovation but of its mesh with the main drifts of society. Innovation in IT is also an issue of its mesh with the main drifts of business and management. At times, IT accelerates those drifts; at times, it conflicts with them. In either case, we need to look at
la longue durée. Otherwise, managers too easily buy into hype like the dumb idea of expert systems replacing managers, the cashless society, and much of the future-is-now-knowledge-worker-on-the- information-superhighway fad. Without a language for and an understanding of managing with technology, managers just as easily overlook uses of IT-from those that transform the basics of competition and the nature of an industry to those (like telecommunications) that make work and service location- and time-independent. Competitive forces have made ever-changing change the norm, rather than the exception, in just about every industry. Yet although IT can make or break a firm's ability to move with those competitive forces, managers are poorly positioned to make decisions about the deployment of IT.
I hope that twenty years from now, no one will talk about IT as different and special. I hope there will be no IT strategies. I state these hopes less from an interest in business than a concern about education. Years ago, Shoshana Zuboff, author of one of the few books on IT that is widely cited in business
books - In the Age of the Smart Machine - told me she believed the real issue concerning IT is exactly the same one that Karl Marx addressed: the nature of labor markets in an era where capital can be substituted for labor. Marx wrote at a time when capital meant machines for manufacturing. Today capital means IT used not so much for information as for information access and information
transferal. I call this the Pensias axiom, named for the Nobel laureate Arno Pensias, who educated me in a wonderful two-hour cab ride and fourteen-hour, delay-plagued plane trip. The Pensias axiom is that any person who stands between a customer and a computer that can fully satisfy that customer's need will, overtime, be eliminated. The bank teller who keyed your withdrawal into a computer system has now been largely bypassed by an ATM. The purchasing department or accounts payable department administrator who took printed output from a computer and sent it to be input into another computer has rapidly been displaced by electronic data interchange. The customer rep you phoned to get your account balance has been replaced by a direct push-button phone inquiry to the relevant computer system. Shoshana's insight is, for me, a critical one: IT over
la longue durée is changing the nature of work and the social contract work assumes.
How do we educate our children for this emerging world, where they own their careers but someone else owns their jobs, and those jobs are always vulnerable to the impacts of the Pensias axiom? How do we educate managers, economists, policy makers, and educators to understand the elements of the technology that most directly affects our children's future? How do we bring IT into the mainstream of humanistic thought, so that it is not always treated as an idiosyncratic offshoot of business, entertainment, and nerddom? I wonder how long it took managers and educators in the Industrial Revolution to make sense of what it meant. I believe that when you are living in a revolution, it is impossible to understand it and that it will be only the historian who can someday say, "Well, of course, it's obvious that in the l990s..."
Something "big" is happening with IT. It has already changed the basics of many industries, is beginning to change the basics of organization, may change some basics of society, and will certainly change the basics of careers and jobs. That makes it part of changing the limits of the possible in the structures of everyday life. IT must, then, be part of the discourse of everyday life.
But not yet. I believe it won't be unless the technology itself is part of the language of the discourse. This is a somewhat unfashionable view in business circles, where we too often hear what I call the "it's easy" fallacy: "If I can do this on a PC, and PC power outperforms the largest mainframe computers of 1984, and we have the information superhighway offering infinite communications capability, it's easy to build a companywide information, transaction, and communications resource." No, it isn't. And if you make the wrong decisions about key elements of the technology infrastructure, it won't be merely difficult; it will be impossible. I believe most innovation in IT is driven by selective exploitation of technology that is often old, driven by organizational smarts and top management's understanding of policy issues. I also believe that technical innovations rarely work on the first pass. In my writing and teaching, I focus on the positive and hope to help generate insight for action. More and more of my work addresses education. I worry that we are preparing students for a world of work that no longer exists, a world where IT is a major disrupter of the old assumptions that qualifications carry you for decades and that experience is an asset. Ask the many middle managers displaced by IT-driven or IT-facilitated changes over the past five years if their experience was an asset in handling the downsizing or reengineering of their firms. It is a truism that organizational adaptation, and even survival, rests on new skills, new education, new learning-and IT. To make the truism more than pious hope, surely we must make IT part of the language of change and of management responsibility and action.
Making IT part of the language of change requires translators. And this is what I am trying to be through my books, teaching, and public speaking. I wish there were many more translators across the business-technology and educator-technology divide-translators who are well grounded in both technology and business. I wish messages about either topic moved more naturally across the divide of culture and language. I doubt that they will move across the boundaries of university disciplinary walls. Alas, the modern American university has become a parody of scientism, with business school IS groups as committed to self-confining paradigms as the narrowest economics or computer science department. By talking to themselves for so long, IS researchers have turned away anyone else who wants to listen.
The messages must move across organizational walls. Books are the messengers. What I find special about the Harvard Business School Press, which will have published four of my books by the time this chapter appears, is that its catalog is so
eclectic. "Eclectic" normally means "eccentric" and
"specialized." I take it to mean "interesting" and
"relevant." I suggest that the link between business and IT is thus an eclectic topic. Turning eclectic from eccentric to essential is an agenda for me and for many other writers. I hope it can become more of an agenda for mainstream management thinkers and for IT experts. The enthusiast in me says it must become so. The realist in me looks back over the past twenty years and is cautious. The pragmatist in me says that IT is now such a part of the fabric of everyday business that it will, in the end, be made part of the fabric of everyday business thinking and education.
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